Tax-treaty

Yes, there is a specific way to report this but you will need to print and mail this return. The reason is that you will need to file a form 8833, which is a claim to the treaty provision.  Form 8833 is not a form that TurboTax supports but does need to be included in your return in order to claim the treaty-based position.  Here are your complete steps for reporting this in TurboTax.

1. Go to Federal Taxes > Wages & Income. 
2. Scroll to the very bottom to Less Common Income and select Miscellaneous Income, 1099-A, 1099-C.
3. Select Other reportable income.
4. Description: "1042-S Treaty Exempt Income"
5. Enter the amount of income
6. Now select the add button, here you will enter an offset to the number
7. For a description, enter "Tax Treaty Relief - [Your Country Name]"
8. Now enter the same amount but with a minus sign in front of it. 

Complete Form 8833 (Manual Step)

TurboTax cannot generate Form 8833 for Resident Aliens. You must do this manually to explain to the IRS why you aren't paying tax on that 1042-S money.

1. Download Form 8833 from IRS.gov. 
2. Fill out the top (Name, Address, SSN).
3. Line 1: Enter your home country (e.g., China, India, etc.).
4. Line 2: Enter the Treaty Article number (e.g., "Article 20" or "Article 21").
5. Line 5: Write a brief sentence: "Taxpayer is a resident alien for tax purposes but remains eligible for treaty benefits under Article [X] of the US-[Country] treaty regarding scholarship/fellowship income."

Step 4: Final Assembly & Mailing

Since you have (Form 8833), you absolutely cannot e-file. Your tax return must be mailed. Include:

1. Form 1040 (Your main tax return from TurboTax). 
2. Schedule 1, 2, and 3 (Generated by TurboTax).
3. Form 8833 (The manual form you filled out).
4. Attach your 1042-S (The physical slip) to the front of the 1040, just like a W-2.